A New Bull Market Signals Opportunities: Top Dow Stocks for 2024

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Different investors interpret the start of a bull market in various ways. The two key criteria often considered are a 20% rebound from bear market lows and the establishment of a new all-time high. While the S&P 500 is close, the Dow Jones has officially entered a new bull market. Here are three top Dow stocks for 2024.

1. American Express (AXP)

American Express, a Dow member since 1982, is a financial services giant specializing in global credit-card payment processing. AXP has significantly contributed to the Dow’s performance in 2023, with its stock surging over 20% year-to-date. The company reported a record-breaking Q3, with a 34% YoY increase in earnings per share. With a positive economic outlook for the U.S., American Express is poised to maintain momentum in 2024. Despite solid gains, AXP trades at an attractive forward P/E ratio of approximately 14.5, offering room for further growth.

2. Microsoft (MSFT)

Microsoft, constituting over 6.5% of the Dow, has been a driving force in 2023, with shares soaring over 50%. The company’s strong performance is attributed to its involvement in generative AI, particularly through its partnership with ChatGPT creator OpenAI. Despite a premium valuation, Microsoft is well-positioned in various tech sectors, including gaming, cloud services, cybersecurity, and quantum computing. The generative AI boom is expected to provide sustained growth, making Microsoft a key player in the Dow’s potential bull market.

3. Verizon Communications (VZ)

Verizon, unlike its Dow counterparts, faced challenges in 2023, with shares down nearly 5%. However, a late comeback following strong Q3 results has shifted the narrative. Verizon beat earnings estimates, improved year-to-date free cash flow by $2.2 billion, and raised full-year free-cash-flow guidance. With a forward P/E of only 8x expected earnings, Verizon presents an attractive option for value investors. Income investors will appreciate its 7.1% dividend yield, supported by 17 consecutive years of dividend increases. With a positive outlook and increased free cash flow, Verizon looks promising for 2024.

Investment Considerations: Verizon Communications (VZ)

While Verizon Communications remains a solid investment, it’s essential to note that The Motley Fool Stock Advisor analyst team has identified alternative stocks they believe could yield substantial returns. For investors seeking a well-guided investment strategy, the Stock Advisor service offers a blueprint for success. With regular updates, expert analyses, and two new stock picks monthly, the service has outperformed the S&P 500 since 2002, providing valuable insights for potential growth.

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